Job seeker to job ratio a stat mashup

Published 4:00 am, Thursday, July 15, 2010

If there are roughly five job hunters for every job opening, why do so many employers receive hundreds of applications for every job posted?

The 5-to-1 ratio is widely quoted, usually to illustrate how bad the labor market is. In a July 7 speech, President Obama said, "Our businesses are hiring again, but there are still five unemployed workers for each job opening."

Many job seekers - assuming it means there should be five people, on average, competing for each job - scratch their heads at that number, saying the reality is far worse.

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It divides the number of people who are jobless and looking for work by the number of job openings reported in the monthly Job Openings and Labor Turnover Survey, better known as JOLTS.

The first number is from a survey of roughly 60,000 households and comes out in the monthly employment report. The latter comes from a survey of about 16,000 workplaces.

The key to understanding this figure is to remember that job hunters apply for more than one job.

Suppose there is a world with 250 unemployed workers and 50 job openings. If every person applies for every job, each job will get 250 applications.

In this scenario, an individual has a 1-in-250 chance of getting one particular job, but a 1-in-5 chance of getting any one of those 50 jobs that month, says Heidi Shierholz, an economist with the Economic Policy Institute, which has been publishing this statistic for years.

The Bureau of Labor Statistics began publishing the figure in April but warns against taking it literally.

With 14.6 million people unemployed in June, "technically there could be 14.6 million people applying for every job opening," says the Bureau of Labor Statistics' economist Mark DeWolf. Theoretically, the number could be higher than 14.6 million if some employed people also apply.

John Wohlford, the bureau's branch chief for JOLTS, says it's like the unemployment rate. It's 9.4 percent nationwide, but it could be higher or lower depending on where you live.

Likewise, your odds of getting a job could be much worse than 1-in-5 if you live in California, "but the jobs are in New York or if the jobs are for Web designers and biochemists but you are a carpenter or mechanic," he says.

Wohlford says this number should be used "as a relative measure over time of whether things are getting better or worse in the job market. If the ratio is 5-to-1 and it's going up, you can assume thing are getting tougher. If it's going down, you can assume things are getting better."

Before the current recession started in late 2007, the highest this ratio ever got was 2.8 in September 2003. (The data goes back to December 2000, when JOLTS began.)

It peaked at 6.2 in November. So in that respect the job market is getting better, but it's still brutal.

Robert Henderson, owner of Epiphany Builders in Oakland, says he posted an online ad for a carpenter on Saturday and within two days had 156 applicants. (The job is filled.)

Kaiser Permanente says it is getting more than 200 applicants per opening for clinical jobs such as nurses and lab technicians, more than 70 applications per job in non-clinical areas such as finance and marketing, and more than 400 for each entry-level job that doesn't require a college degree.

Part of the reason employers are getting hundreds of applicants is "because it's so easy to apply over the Internet. People are desperate, so they press send and apply to any job that seems remotely close," says Abby Snay, executive director of Jewish Vocational Service in San Francisco.

"We're hearing that companies are just overwhelmed by the number of resumes they get, sometimes to the point where they say we won't post online and we'll use word of mouth to recruit. Everyone knows someone looking for work," Snay says.

Today, California consumers can get $200 in cash back on a refrigerator, $100 on a clothes washer and $50 on a room air conditioner.

On July 28, the commission will vote on a proposal to add rebates on energy-efficient dishwashers ($100), freezers ($50), water heaters ($100 to $750 depending on type), and heating, ventilating and air-conditioning units ($200 to $1,000).

The federal stimulus act passed in February 2009 gave states a total of $300 million to set up rebate programs. While some states ran out of money in a few days, California's program, which started April 22, still has about $20 million of its $31.7 million in rebate money available.

Consumers will have to wait until July 29 or later to purchase appliances in the newly added categories to be eligible for rebates, assuming the expansion is approved.

Rebates will continue to be doled out on a first come, first served basis until the money is exhausted.

The buyer must replace an existing appliance with a new appliance of the same type, purchase within the specified time period from a California retailer (or dealer or contractor under the proposed rules) and recycle the old appliances according to program rules.